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Pound to Euro, US Dollar Exchange Rates Crash as UK Inflation Fears Boil Over

  •   – Chancellor warns of UK inflation risk
  • Other UK News focused on Heathrow – Third runway approved, protests voiced
  • UK growth rate results due Thursday – Fed speech due this evening

The Pound has dropped off in a major way against the Euro and US Dollar today, in addition to trading poorly against virtually all other rivals. The source of this negativity is thought to be Chancellor Philip Hammond, who has stated that with the Pound being severely weakened post-Referendum, UK inflation could rise considerably. With UK wage growth still extremely low, this situation would likely harm many of the UK’s lowest income families.

Elsewhere, the news has arrived that after seemingly decades of deliberation, a third runway has finally been approved at Heathrow. This has been celebrated by some and blasted by others, with many MPs vowing to legally obstruct or block this proposal however they can.

Looking ahead, the US Dollar may be shifted in the near-term by a speech from Fed official Dennis Lockhart, which is due just after 6pm GMT.

(Last updated October 25th, 2016)

The Pound began trading today in a semi-positive position, but has since dropped off due to an unsatisfactory ending to the day’s meeting in Downing Street.

Hopes were lukewarm at best before the meeting, and as comments from Scotland’s First Minister Nicola Sturgeon showed, frustrations ultimately boiled over about the government’s lack of clarity on its Brexit objectives.

In US Dollar news, the currency has risen against a number of regular peers, although recent Fed remarks have spread uncertainty among US Dollar investors. Notably, while the manufacturing PMI flash for October has risen from 51.5 to 53.2, a warning from James Bullard that low interest rates are ‘here to stay’ has essentially limited any positive movement for the US currency.

(Last updated October 24th, 2016)

Euro exchange rates have fluctuated in the wake of supportive PMI stats, while the US Dollar has been in low demand ahead of potentially contrasting Fed speeches.

Pound Exchange Rate News: Minor Gains for GBP Highlight Continued ‘Brexit’ Uncertainty

The Pound has started off trading in a weak position this week, having made only fractional advances against the Euro and US Dollar.

The latest UK domestic data has come from the Confederation of British Industry (CBI), which has reported an improvement in Q4 business optimism from -47 to -8 but a drop in industrial orders in October from -5 to -17.

More notably, Prime Minister Theresa May has been hosting a meeting between the heads of Wales, Scotland and Northern Ireland, in an effort to quell concerns that these devolved nations may be economically damaged by a ‘Hard Brexit’.

Voicing his grievances ahead of the summit was Scottish Brexit Minister Michael Russell, who said;

‘We didn’t ask to be in this position. It’s extremely important we say what we think the position is and it’s extremely important that’s listened to’.

Euro Exchange Rates Trending Flatly after PMI Results, USD Soft as Week Begins

The Euro has been static against the US Dollar and the Pound today, having been virtually unimproved by the latest Eurozone PMI flashes for October.

These have shown a rise for both Germany and the Eurozone on the month, though the French composite and services results were less supportive, having fallen in both cases.

Economists generally received the Eurozone news positively, citing it as a sign that the single currency bloc is back on its way to recovery after long periods of low inflation and dwindling growth figures.

The US Dollar has been a poor option overall during trading today, having trended narrowly against the Euro and Pound and declined more notably against the Polish Zloty and the South African Rand.

As no direct US data has come out yet today, it seems the ‘Buck’ is still being adversely affected by concerns that a December interest rate hike may not come through. This sentiment has been exacerbated by recent Commerce Department data that shows a significant drop-off in the number of US startup companies.

EUR USD exchange rate news

Future GBP EUR USD Forecast: Possible GBP Crash due on UK GDP Stats

The rest of the week may not be especially bright for the Pound, especially given the results forecast for incoming UK ecostats.

Of particular note is Thursday’s preliminary Q3 GDP growth rate stats, which are expected to show a drop on both the quarter and the year.

From the Eurozone, German Ifo and GfK confidence results are due over Tuesday and Wednesday, both of which have been forecast to rise in October and November, respectively

This afternoon will bring the first major US news of the week, consisting of Fed speeches from four key policymakers.

Current Interbank Exchange Rates

The Pound Euro (GBP EUR) exchange rate was trending in the region of 1.12 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.89 today.

The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.22 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.81 today.

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.08 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.91 today.